Audi has turned up the heat on the S3 as it prepares to take the fight to the likes of the recently introduced BMW M135i and upcoming Mercedes-Benz A45 AMG in what is set to become an intriguing battle for premium-brand hot-hatchback supremacy.

Audi does not sell the current S3 in the U.S. market.

The third-generation model of Audi's all-wheel-drive S3 is pictured here officially for the first time ahead of its public debut next week at the Paris motor show. It is the first in a series of new performance cars from the Volkswagen Group to benefit from an advanced turbocharged 2.0-liter direct-injection gasoline engine developed from scratch as part of Audi's EA888 engine family.

With 296 hp at 5,500 rpm and 280 lb-ft of torque between 1,800 and 5,500 rpm, the new four-cylinder engine provides the S3 with unprecedented levels of performance. There is an additional 35 hp and 22 lb-ft of torque compared with the EA113 engine used by the second-generation S3 on sale since 2006.

The power is channeled through either a standard six-speed manual transmission or optional six-speed double clutch S-tronic gearbox. The latter offers steering wheel-mounted shift paddles and an automatic mode for hands-free shifting. Drive is apportioned to all four wheels via a Haldex-style multi-plate clutch.

Audi quotes a 0-to-62-mph time of 5.1 seconds for the new S3 running the S-tronic gearbox, while the manual posts a time of 5.4 seconds. Top speed is limited to 155 mph. Combined city/highway fuel consumption on the European test cycle is put at 34.1 mpg for the manual and 33.6 mpg for the dual-clutch car.